Jefferies cuts Airbus target price to EUR 195 from EUR 215
TL;DR
Jefferies cuts Airbus target price to EUR 195 from EUR 215, maintaining a 'Neutral' rating due to production delays, supply chain issues, and lower earnings growth expectations, despite long-term demand optimism.
Jefferies cuts Airbus target price to EUR 195 from EUR 215
Jefferies Lowers Airbus Price Target to EUR 195 Amid Production and Earnings Concerns
Jefferies has revised its price target for Airbus (EPA:AIR) to EUR 195 from EUR 215, maintaining a "Neutral" rating for the stock, as the brokerage cited near-term challenges in the company's commercial aircraft segment and broader operational headwinds. The downgrade reflects concerns over delayed production ramp-ups, integration complexities, and weaker-than-expected earnings growth, despite Airbus' strong fourth-quarter performance.
The brokerage highlighted that Airbus faces hurdles in scaling its A320 family production, with near-term delays and supply chain constraints limiting upside potential. Additionally, flat delivery expectations for the A350 program through 2025 and integration challenges in aerostructures businesses are expected to pressure margins. Jefferies also noted the absence of a share buyback announcement, which removes a potential support mechanism for the stock.
Revised financial assumptions further contributed to the price target cut. Jefferies reduced its earnings per share (EPS) estimates for 2025, 2026, and 2027 by 2%, 4%, and 9%, respectively, due to slower-than-anticipated earnings before interest and taxes (EBIT) growth in the commercial segment and adjusted foreign exchange assumptions. These factors, combined with geopolitical risks such as potential tariffs, create a cautious outlook for Airbus' short-term trajectory.
While Airbus remains competitively valued relative to peers, Jefferies anticipates a sideways stock movement in the near term, driven by delayed deliveries, downward revisions in consensus estimates, and execution risks. Investors will be watching for improvements in production efficiency, supply chain resilience, and potential share repurchase programs to signal a more favorable outlook.
The revised EUR 195 target price underscores Jefferies' tempered view of Airbus' ability to navigate current challenges, though long-term demand for its aircraft and a backloaded earnings tailwind from 2025–2029 remain key positives.
